The pan-European STOXX 600 closed 0.18 percent lower with most sectors in negative territory.Insurance stocks were among the worst performers on Friday, down by 0.56 percent with several stocks in the sector moving lower. Netherlands-based insurance group Aegon released its annual report and forecast several financial and economic uncertainties ahead. Its shares were over 5 percent lower.

Oil and gas stocks also moved lower with all major European stocks in the sector heading south. Total was among the worst performers after it reported its 2016 turnover had slipped by $16 billion from the year previous to $152 billion in 2016. Total's shares were 0.6 percent lower.

German technology firm Rheinmetall announced on Friday it had formed a joint venture with Rohde & Schwarz to compete for two major procurement projects, according to a Reuters report. Its shares were close to the top of the Stoxx 600, trading over 4 percent higher on Friday. Infineon, the chip maker, climbed 9 percent after raising its guidance. On the data front, the composite Purchasing Managers Index (PMI) for the euro zone came in stronger-than-anticipated, rising to 56.7 from 56.0. The flash reading represents the highest first quarter average in six years.Sterling slipped against the dollar on Friday after gains made in the previous session following stronger-than-expected U.K. retail sales data for February. Sterling fell by around 0.2 percent to $1.2492. In the U.S., markets opened slightly higher as investors watched for a repeal of Obamacare.

Trumpcare vs. Obamacare

Trump warned House Republican lawmakers on Thursday that he is prepared to leave Obamacare unchanged and move on to tax reform if they do not vote in favor for new health-care legislation on Friday.

Elsewhere, Russia's central bank somewhat unexpectedly announced its decision to cut interest rates to 9.75 percent on Friday. The bank also signaled more rate cuts in the coming months as inflation rates appeared to align with target levels.